The Art and Science of Funny or Die
So what's next, creatively, for Funny or Die? "We want it to become sort of a comedy institution," says Appel, "kind of like Saturday Night Live or UCB." In line with that, the company not only allows but encourages its talent to branch out; Appel just wrote a pilot called Death Valley that got picked up for 12 episodes on MTV.
Likewise, Funny or Die itself is expanding into television and film production. That began with the HBO series Funny or Die Presents, which is currently shooting its second season. The first season was mostly outside content that Funny or Die lent its name to, says McKay, while Season 2 will be almost exclusively produced in-house.
"Our mission is to leverage the assets we have to be the definition of a 21st-century new media studio," says CEO Dick Glover. "That definition means production of whatever medium, distributed via whatever technology makes sense."
The Science
As goofy and boundary-free as the Funny or Die content is, everyone from Glover down to the writers has a keen sense of the importance of not just using technology but using it wisely.
The company has its own team of programmers and engineers in its technical office, which just moved from Palo Alto to San Mateo. While those employees built much of the Funny or Die site-the player, for instance, is a "highly modified" JW Player, says Galbraith-the architecture today is a mixture of in-house and cloud-based computing. The website coding itself happens on-site, while the video encoding is done using On2 Flix Pro on Rackspace servers in Dallas, and the content delivery is handled via Amazon Web Services.
And even though Funny or Die is all about video, the video itself is only one part of the overall success of the company.
"One of the great strengths of our company, and one frankly I think is most overlooked, is the whole social media marketing," says Glover, who has a 20-year history in broadcasting and new media at Disney, ABC, ESPN, and NASCAR. "By having the [technical] office and having the people who live that-it's part of their DNA-we really have become quite good at it."
"Between Two Ferns with Zach Galifianakis," the site's most popular recurring series, is a perfect
example of Funny or Die's low-budget approach; every episode is shot in a small back room of
the company's Los Angeles office.
How good at it? The team has determined that the optimum number of tweets per day is seven and a half, says Patrick Starzan, Funny or Die's vice president of marketing. "We look at all the metrics and figures out the best time of the day to tweet, the best type of content to have in the tweets," he says. "We know that if we tweet a joke out at noon as opposed to tweeting out a joke at 3 p.m., we get 100 retweets versus 50 retweets. At the end of the day, it's a very data-driven business."
And whether it's Twitter, Facebook, Tumblr, Digg, Reddit, or any other social media platform, "We're all very avid users, we're all passionate about doing it personally, so doing it for Funny or Die is very natural to us," he adds, even if they're doing it within the constraints of a "very specific content calendar that we follow from day to time of day of what we're going to do."
Just as expanding to producing content for television and film is part of Funny or Die's mission, so is getting that content on multiple devices, from set-top box to mobile. But even there, the company is taking a measured, cautious approach. Glover says his philosophy is "the opposite of Field of Dreams: If they come, we will build it." Which explains why Funny or Die hasn't necessarily been at the vanguard of mobile video. Rather than creating an iPhone app in-house, for instance, the company has licensed its content to Babelgum.
"Our approach is to make lightweight licensing relationships with very low-work implementations," says COO Galbraith. "We'll let our content be out there and see what sticks. If there's one platform that rises to the top and we really start to see traction, we can invest more in building a slicker application."
Galbraith says those sorts of licensing deals represent about 10% of Funny or Die's revenues (the exact numbers of which the company won't disclose, but Glover says Funny or Die is profitable). Production fees account for about 25%, while advertising accounts for about 65%.
Of that 65%, Galbraith says, about half comes from "good old-fashioned IAB advertising." But McKay adds that Funny or Die has, for the most part, stayed away from more invasive formats, such as screen takeovers. "We don't ever want to be the obnoxious one who's out front with that trend," he says.
The other half of the site's advertising revenue comes from custom or branded videos. Maintaining credibility with viewers is ultimately crucial to the site's continued success, and so advertising needs to be approached thoughtfully. While most of the advertisers who approach Funny or Die will be a fit for its demographic-"You're not going to see Halliburton advertising," McKay says-the ones who want to do branded content have to allow Funny or Die to handle the creative. "Our philosophy is that we know funny, and brands know their brand," says Glover. "Let's marry the two together and make something good that serves the brand."
In the end, McKay credits the site's financial success paradoxically to the fact that, early on, he and Henchy (and Ferrell, though he's not involved much in the day-to-day operations) decided to not make any decisions based purely on money. "Several times, we've said no to decisions that, in the short term, looked like they could have produced a bunch of money or synergy or crossover.
"We make all of our decisions based on whether it's interesting, funny, challenging, or form breaking," he says. "If any of those categories get checked, then we go and do it."
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